The Workers' Paradise A Discussion of Workers Cooperatives and Building the New Economy

September 21, 2015

Pope Francis and Co-operatives

Tomorrow, Pope Francis arrives for his first visit to the United States. This pope, hailing from Argentina, brings with him a message for all of us in terms of building our economies–the quest for wealth needs to be more than monetary. In this, the Bishop of Rome has found the co-operative economic model to be one that can go beyond materialism and help lift people up.

In March, as reported by  The Cooperative News, he spoke directly about the co-operative model:

“‘The leader of the Catholic Church also argued that co-operatives could enable people to achieve all their potential. He said: ‘A member of a co-operative must not be merely … a worker … but must instead always be a protagonist, and must grow, through the co-operative, as a person, socially and professionally, in responsibility … an enterprise managed by a co-operative must grow in a truly co-operative way, involving all’.”

This language resonates with those of us who have studied Mondragon and the teachings of Don José María Arizmendiarietta. It is the 100th anniversary of the Basque priest’s birth. In celebration of this centennial, I engaged his writings in my classroom. Each class, students were asked to bring a quotation from this collected musings Reflections” available on-line.

In the coming days and weeks, I wish to bring that experience on-line. The following is a quote from Reflections. I will add my comments below, but I encourage you, dear readers, to add your own reflections or to find quotes from the web site that resonate with you and share them here.

Let’s honor the visit of Pope Francis by honoring the 100th Anniversary of the birth of Mondragon’s spiritual founder and engage in a discussion about co-operation, values and the development of the human.



This experience corresponds to a new spirit of trust in human beings and in their capacity. It revives in this case the sense of freedom, dignity and justice, evidently accepted in the traditional and democratic institutions in our land, this acceptance being manifested in the idiosyncrasy of our people. One of our characteristics has been our practical sense, knowing how to act in the milieu of possibilities, without renouncing or being indifferent to our ideals. We have known how to muster and not waste our opportunities to improve the common good. Our processes of association are not viable without moderation and the consenting of all of our people, who usually have to sacrifice personal positions. Radicalizations are contrary to the human and social virtues as well as to the most constant qualities of our people.

I decided to start with a rather chunky quote and one that some might find a bit controversial. The first part that struck we was Arizmendiarrieta’s faith in the method (or experience) of worker ownership through co-operation. It is more than simply creating a job with slightly better pay or a retirement plan. Although those aren’t bad things in and of themselves, the current dogma or “getting to scale” with a focus on size and ESOPs rather than on worker control and teaching workers how to manage seems short-sighted to me and lacking the key thing that makes worker co-operation so exciting.

Co-operation must also be about creating new human relationships in which we learn to value each other as human beings, as individuals, even while engaging each other for our co-operative ends. It is about embracing the idiosyncrasies, being able to see disagreements as a pathway to development and consensus. Falling into the money chase and big is better camp seems counter-productive to me in that even if the organization succeeds as a business, it ends up looking and feeling just like any other large business. Co-operatives need to break up this isomorphism.

The second part of this quote counters calls for radicalization. I imagine many (regardless of political affiliation) will question the Don of Mondragon as the political environment in the US and many countries seem to have become polarized with calls for dramatic action (and even military action) to deal with political and economic frustrations. Yet, too often, the goals of these movements get co-opted by their leaders (see Greece for the most recent example) as the trappings of power for the leaders become more important than the cause of the followers. Is this because radicalism focuses on people frustration and anger instead of the human and social virtues? I think that is the message in this statement. Co-operation, especially that espoused by Arizmendiarrieta tends to avoid the limelight of the political debate and alignment with political factions by focusing on education, information, and communication among its membership. By focusing on humans, not as pawns for larger political moves, but as the central raison d’etre, co-operatives can keep plugging along even as the countries bounce from one ism to another (See Italy and Spain). A revolution of spirit is needed that sees all of us as connected–I guess to some that may be radical, but to me it is a key part of co-operation.


May 28, 2014

How Do We Measure Coops?

Filed under: Education,Movement,Uncategorized — Tags: , , , — John McNamara @ 7:51 am

Last week I attended the Tools to Measure Performance and Impact at St. Mary’s University in Halifax. The conference was part of a several year research CURA known as the Measuring the Cooperative Difference. Part of my role with this group involves reporting out of the conference–this will be done by the end of June in time for the ICA Research Committee’s conference in Croatia.

The central question and scope of the work has been to find viable measurement tools for cooperatives and credit unions that specifically address the nature of cooperatives as democratic social enterprises. Using standard data such as debt/equity ratios and return on equity may tell us how coops fare when compared to the investor owned businesses, but they don’t tell us how coops are doing as coops.

Vancity Credit Union in British Columbia found the need to create new measures since they invest in what might be called the “real economy”. When using data around local investments in actual businesses (not artificial constructs such as the derivatives of 2008 fame), credit unions tend to out-perform banks. They are part of the Global Alliance for Banking on Values (GOBV).

One of the speakers from Cooperatives America, argued that we need to stop using tools designed for capitalist market economy and create tools for the social market economy. Others argued that we in the cooperative community should quit trying to compare ourselves to the investor -owned competitors, and start presenting ourselves as the model and let the investor-owned organizations compare themselves to us and justify their existence. It was a bit of a feisty crowd for Canadian academics!

In all seriousness though, a number of incredible tools have been created to measure cooperatives as sustainable and resilient organizations. That last bit is important as one of the presentations presented the harsh realities of climate change and carbon in the atmosphere. It is unlikely that anything will stop humans from permanently altering the environment in a way that is quite negative for the species that have adapted for its current format. Today, as I post this, I see headlines that North America has hit the 400 ppm mark for carbon in the atmosphere (450 ppm is the “point of no return” mark). It is unlikely that coops can scale up to a point to reverse this trend, but we can be there for the aftermath.

The tools being developed now will be able to assist us in tracking our success and helping to point the way forward. It won’t be on the maximize profit model, but on the maximize community model. Over the next several posts I will discuss some of the models.

I am currently at the Canadian Association for Study in Cooperatives (CASC). It is being held at Brock University (just west of Niagara Falls) and named for Isaac Brock the Canadian general who gave his life repelling the US army when they attempted to invade Canada during the War of 1812. More to come!

April 22, 2013

Democracy at Work Network

Filed under: Education,Movement — Tags: , , , , — John McNamara @ 12:14 pm


I was recently reelected to DAWN’s Board of Governors and the Training and Certification Committee. I am also a founding member of the organization. The following opinion (pitch, if you will) is all mine, however, and should not be seen as a statement by DAWN or representing DAWN.


Last weekend, the third annual spring meeting of the Democracy at Work Network (DAWN) convened along with the certification of its third cohort of Peer Advisers. It was an incredible weekend and we were reminded by our the folks on the Marketing Committee that we need to get the word out.

What is DAWN? 

DAWN is, as it names implies, an organization of people aimed at assisting worker owned businesses in improving their functionality and governance as a democratic workplace. What makes DAWN different from a consulting service or academic pursuit arises from the population of the group. DAWN focuses on Peer Advising. The majority of people in DAWN either work in a worker cooperative or have worked in a workers cooperative within the last five years. This is an essential element. While we do have members who work as professional consultants, DAWN looks to embody the concept of inter-cooperation and solidarity. Peer Advisers don’t need to learn about the dynamics of workers cooperatives since they live those dynamics.

However, this isn’t just people who work in co-op sharing war stories. The certification process ensures that the PA can provide the level of assistance needed. The first year of membership is spent engaging in intensive training through webinars and weekend retreats. while learning about financing, legal structures, strategic planning and a host of other issues, PA apprentices conduct research about coop models, teach each other about those models, and participate in an internship utilizing their host and a mentor for guidance. All of this culminates, if successful,  in becoming a Certified Peer Advisor.

DAWN’s Goal

DAWN ‘s stated goals are to:

  • meet the demand for technical assistance and development advice with high-quality services, and
  • increase worker cooperative technical assistance capacity from inside the movement.

I think that an unstated part of this is to also get our worker cooperatives (over 300 in the United States) to not always rely on a “do-it-yourself” method of development. Too often, in my opinion and experience, co-operatives either ignore development as something too expensive or too corporate or just too complicated. If co-ops do engage in development, then it is usually the result of a small group within the coop driving it and not necessarily part of a strategic vision. At best, everything is successful and the people leading have the knowledge, skills and ability to manage the manage the program and  are around long enough to see it through to fruition. At worst, it creates a series of false starts that further stigmatize coop development or organizational development as expensive, time consuming and not worth the effort. For most cooperatives, I imagine, the reality lies somewhere along the continuum between those extremes with most co-ops just feeling too busy managing operations to deal with the larger picture issues until an issue reaches a boiling point and demands the attention of the group.

Why DAWN Can Help Worker Coops Succeed

Operations tend to be what we are best at as co-operators. I think that this is a nature aspect of worker cooperation. We get the gritty details of getting people cabs, fixing bicycles, running retail operations, and making/roasting coffee. Sometimes the bigger picture of long-term planning, capital planning, organizational culture, governance and accountability gets lost in the mix as we try to keep our customers coming back, pay ourselves and our vendors. Some of these development issues get us outside of our comfort zones and don’t seem to really make a difference, so why spend our members’ hard-earned equity on it?

Worker Co-ops need to create new ways of managing. We aren’t our competitors and don’t want to be. Taking the time (and money) to think and create new ways of managing the collective assets of the cooperative in a manner that strengthens the organization along cooperative values and principles should help make our coops stronger and more resilient to the demands of the market place. It should create added-value for the consumers of our operations. Sometimes, this can be hard to do by ourselves. We may not always have the right mix of knowledge and skills or there may be underlying social issues that prevent moving forward. This is true of any type of business, not just worker coops and is why consultants often get brought into any business.

DAWN offers the ability to efficiently deal with development issues and build structures tailored to the individual cooperative. Outside facilitation can assist the members is seeing their organization from a different perspective, learn from other worker coop models (cross-pollinate if you will) and develop systems and strategies that will help their cooperatives meet missions, core values and be successful. DAWN is a fee-for-service organization. It isn’t cheap, but it does provide value.

DAWN was created to help coops help themselves through a peer assistance program. If you think that your coop needs some outside assistance, please consider DAWN as a resource created specifically for worker cooperatives.

To keep up to date with DAWN check them out on Facebook or Twitter


June 11, 2012

Sensemaking in Worker Cooperatives

Filed under: Education,Pensimientos — Tags: , , — John McNamara @ 12:36 pm

For my theory class, I am currently reading a classic article on sensemaking in organizations: “The Collapse of Sensemaing in Organizations: The Mann Gulch Disaster” by Karl Wieck

The article reviews Norman McLean’s “Young Men and Fire” and theorizes about the breakdown of organization among the 15 smoke jumpers that led to the death of 13 of them.

It struck me as a timely article as many of our co-operatives have started to embrace a new economic environment that fundamentally changes our sense of place in the world. This is especially true in states that have proceeded to follow in the steps of, to use Naomi Klein’s excellent word, “disaster capitalism” or the “shock doctrine.” Just as the firefighters in 1949 found themselves in a situation that no longer made sense with their expectations, the changes to the role of government and its relation to the economy have created a new reality that needs different perspectives. There is a key paragraph in Wieck’s article that I find especially pertinent, it references one of the key assumptions of the smokejumpers that the fire being attacked was a small brush fire that could be easily contained by 10:00 am the next morning–it turned out, due to winds, weather and terrain to be something much bigger:

“The crew’s stuborn belief that it faced a 10:00 fireis a powerful reminder that positive illusions (Taylor, 1989) can kill people. But the more general point is that organizations can be good at decision making and still falter. They falter because of deficient sensemaking. The world of decision making is about strategic rationality. . .Sensemaking is about contextual rationality. . . People in Mann Gulch did not face questions like where should we go, when do we take a stand, or what should our strategy be? Instead, they faced the more basic, the more frightening feeling that their old labels were no longer working. They were outstripping their experience and were not sure either what was up or who they were.”

This cause paralysis, fear, and ultimately very bad decisions by individuals which ended their lives. Our co-operatives are not facing forest fires, however, we are facing a changing economy. Wieck’s lesson is that we need to do more than follow through the rote of strategic planning. We need to engage in collective sensemaking as well. As we get pushed out of our comfort zones, we need to try to re-align our senses.

I think that this is something that worker co-operatives may have an advantage in dealing with. We tend to, as Roy Morrison quotes the Mondragon members, “build the road as we travel.” We have, as a movement, a culture of innovating, making do, and generally trying to negotiate an economy that doesn’t really get us. To do so, however, means resisting the tendency towards conservatism and isomorphism within our resepective industries. “Our co-operatives must primarily serve those who see them as bastions of social justice and not to those that see cooperatives as refuges or safe places for their conservative spirit” ( Don José María Arizmendiaretta, Reflections, 461)


February 13, 2012

Markets Can Be Healthy

Filed under: Education,Movement — Tags: , , , , — John McNamara @ 12:12 pm

As part of my studies this semester, I am reading the English edition of Cooperative Enterprise: Facing the Challenge of Globalization* by Stefano and Vera Zamagni.

In their opening chapters, they lead a discussion about the nature of cooperation (from their Italian perspective), the nature of competition and the nature of the market.

For decades, Stefano has argued that capitalism has been incorrectly used as a synonym for “free market.” Indeed, that connection is so embedded in our culture in the United States that anyone suggesting anything else often gets labeled a socialist. The dominant paradigm sees the dichotomy of the planned economy of socialism and the market economy of capitalism. There isn’t any other means except the historically defunct feudalism.

Today isn’t about getting into the argument about State Capitalism of the former Soviet Union and modern China, rather, it is about debunking the intimate connection between a free market and capitalism. The Zamagni’s carry this thought throughout the introduction to their book.

Essentially, they argue in the language of Flora and Fauna taxonomy. If we consider the “marketplace” to be the Genus of this particular economic strain, then capitalism is but one species within it. Co-operation, they argue is a unique species within the free market. Cooperation is not opposed to the marketplace, but utilizes it in a manner that seeks to maximize the benefit for the community. Capitalism utilizes the market to maximize the benefit for those owning the capital. Both are subject Adam Smith‘s invisible hand of the marketplace that provide the mechanism for each type of business to make adjustments. Both seek to use government (although capitalism is much better at it) to ameliorate the effect of the invisible hand towards the benefit of their shareholders or stakeholders as the case may be.

As a condition of this, competition plays different roles. In the capitalist species, competition is expected to be a ruthless Darwinian arbitrator determining the most fit organization (again for the benefit of the narrow group of stockholders). In the Co-operative species, however, competition plays a much different, almost helpful, role. The authors argue that the root word for competition is cum petere (“literally, tend together toward a common goal”). It is the basis of a free market. This is the antithesis of “creative destruction”:

“We are well aware of the many economic advantages created by this mechanism. But we are equally familiar with its brutality, its harmful social and political reprecussions. And it is clear that creative destruction may enjoy some legitamacy as long as the value of what is created is grreater than that of what is destroyed, that legitamcy ends when–as is the case today–the relation is inverted. We call the specific form of competitive practiced by cooperatives ‘competitive cooperation’, which is a powerful antidote to the damage that would be done by positional competition. “(Zamagni, 2010, 4)

A competition to see who can best serve the community is part of a truly free market. Further, a free market also requires an educated consumer. In the cooperative species, this means much more that printing ingredients on labels. For one, it means that the consumer (in the broadest sense), must be able to read and understand that label! It means that the consumer must posses the analytical skills to discern between products and services and the related price. During this election year, we will hear a lot about paying for education and the free market, but we will likely not hear about how they are connected. We can’t have a free market if we don’t have a populace educated to a level that allows them to make informed decisions.

Of course, this is one of the key traits of the Co-operative species as espoused by the 5th Principle: Education, Information and Training. The principle states: “Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.”

Co-operation, not capitalism, embraces the free market. Capitalism uses a vicious form of competition, the type found in nature by parasites, to stifle other actors in the market. The Zamagni’s quote economists Rajan and Zingales’s work Saving Capitalism from Capitalism (2003, University of Chicago Press):

“The worst enemies of capitalism are not union agitators with their corrosive critique of the system, but the managers in pinstriped suits who sing the praises of competitive markets in every speech while they try to suppress them with every action.”

The next time you hear someone trying to red-bait our movement, you could have a lot of fun pointing out that the practice of modern capitalism is much closer to the Kleptocracy of Russia and the party contolled economy of China while the true competitors and champion of the free market are, in fact, co-operatives.

*The only place that I have been able to find an English copy of Cooperative Enterprise has been through Abe’s Books, however, if your local book coop has a good search engine, they might also be able to find it.

December 12, 2011

Towards a Cooperative Legislative Education Foundation

Filed under: Education,Movement — John McNamara @ 4:21 pm

Cooperatives need to start being engaged in the development of public policy. This doesn’t mean taking sides in the bipartisan wars that often force US citizens to choose which party to support: the party supported by Wall Street that wants to eliminate regulations and the party supported by Wall Street that supports some regulation.

The Corporatists already have a thriving organization called the American Legislative Exchange Council.They have become quite newsworthy over the last year as state after state has begun passing laws developed at their conventions and in their think tanks. As The Center for Media and Democracy has shown, this 30 year project of the Corporatists to destroy Keynesianism and even revert back to the days prior to the Sherman Anti-trust Act, has been behind significant legislation that has undone decades of the social contract in the United States.

We can wring our hands about this, or we can learn the lessons worth learning. Our elected representatives have little time to learn about new ideas. They need people to help inform them and even draft proposed legislation. There is nothing wrong with concerned citizens doing this. The problem is that only one side of the multi-factor equation is really acting along these lines and that is ALEC.

I propose that we worker co-operators (and maybe even the other sectors as well) form a similar think-tank. We need to start working together to develop public policy that promotes the ethics, values and principles of co-operatives. These proposals will create a more sustainable community and provide the antidote to the profiteering ways of wall street by providing the means for a base economic structure. The profiteers can still profiteer, but communities can also choose to build strong local economies to offset the effects of the corporatist class.

I propose calling this group the “Co-operative Legislative Education Foundation” or CLEF. The Clef is a musical symbol used to instruct the music. It serves as a reference point for the musical. So, this organization, CLEF, will also serve as a reference point for our communities. I like the idea of using the Middle C Clef as a symbol for this foundation:


This suggests that our goal will not be the extremes of our community, but the balanced middle. The proposals for this organization should be at least bi-partisan but include as many sponsors as possible. Our goal should not be to get a single party elected but to create good public policy that builds strong local economies.

Over the last ten years, the US worker cooperative movement has blossomed. We have moved from a rag tag group of alienated co-operatives with few regional and local support systems to a thriving movement. We have a well established federation, the USFWC, which will be hosting the 5th National Worker Co-operative Bi-annual Conference in Boston next June, we have two strong regional groups: The Western Worker Cooperative Conference and the Eastern Conference for Workplace Democracy. We have helped to create CICOPA North America. We have a busy peer adviser network in the Democracy at Work Network and an educational non-profit, the Democracy at Work Institute. We need a political wing–again, not to promote any political party–to develop and promote good public policy that will advance our co-operatives, build strong sustainable local economies, and re-power workers in taking control of their lives through democratic control and ownership of their work.

Creating CLEF will be one of my goals in the coming year. For those of you with the time and interest, I hope that you contact me–our movement is already creating a better world, by drafting and supporting public policy, we can do even more and create opportunities for millions of workers in this country.

November 28, 2011

Co-ops Need to be Part of the 2012 Election Cycle

Filed under: Education,The Cleveland Model — John McNamara @ 11:40 am

This morning I received an email from a friend about running for the county board. My response was supportive, with a caveat. Talk about how the County can promote cooperatives as a means of rebuilding a sustainable economy.

As the 2012 election cycle begins (in Wisconsin, the spring election for local goverment commences on December 1st when Candidate can start circulating petitions) and the recall election of Governor Walker edges ever closer to reality (over half of the needed signatures have been collected in just two weeks with 45 days left), co-operatives need to get their message out.

While our co-ops tend to be apolitical beasts, we need to recognize that there are times when we must be involved. Now is one of those times. It doesn’t mean endorsing candidates, but it does mean getting worker co-operatives recognized and talked about.

Last year, in Madison, we successfully managed to make worker co-operatives (and co-operatives in general) an issue in the Mayoral campaign. One candidate embraced us, the other ignored us. Very little separated the two (and if it wasn’t for a major controversy over a local hotel, it might not have been close). Today, we have a Mayor who has committed to working with co-operatives and will be hosting a conference on co-operatives for city planners and decision makers next spring.

This coming year, we have even more to talk about. There is the National Cooperative Development Act working its way through the Congress. There are more examples of local communities embracing co-operatives. Not the traditional “hippie” communes of Madison, San Francisco and Portland but places like Cleveland, OH and Richmond, CA. Cities who have suffered the most from globalization have started to rebuild their economies with worker co-operatives. As the article in the Los Angeles Times (see the Richmond link) points out, these aren’t just the usual boutique bakeries (although they do exist), but include plumbers and other professional services.

We need to push the candidates, regardless of their party, to recognize co-operatives as a strong economic model for growth. It is a model that depends on the the mutual self-help and self-responsibility of its membership. Co-operation offers a true alternative to the tired debate between neo-liberalism and Keynesian economics. This year, the International Year of the Co-operative, offers us a great opportunity to talk about the real “road to serfdom” which is the subordination of our communities to globalized capital.

Start bugging the candidates–if they are running for congress, ask them to declare their support for the National Cooperative Development Act. If they are local elections, ask them to support (or even suggest) ideas on how the county or municipality can help co-operatives develop and succeed (such as ensuring that co-operatives are part of the development process for any city project–i.e., can a co-op model solve the problem before the city).

If enough people start asking the co-op questions, the candidates will definitely hear us. If we ask enough, they might even respond. If we keep asking, they might even learn about and start supporting co-operatives after they get elected.

October 10, 2011

North American Worker Coop Conference This Week

Filed under: Education,Movement — John McNamara @ 10:08 am

If you happen to be near Quebec City this week, two exciting conferences will be taking place. The first is about business succession planning with an emphasis of selling businesses to one’s employees. The second in the first ever conference of North American worker cooperatives and will include the creation of the CICOPA-North America group.

The first conference develops as a cooperative reaction to the estimate that, in Canada alone, 200,000 small business owners will be retiring over the next 10 years. For many, they will not have children interested in running the business. Further, the buyers may be more interested in simply shutting the companies down instead of maintaining them. Worker cooperatives offer a great opportunity for the owners to sell to their employees. This allows the legacy of the owner to carry on into perpetuity. They will not see their life’s work simply boxed up and shipped away. For the children who inherited a company that they don’t really want, it gives them an opportunity to realize their inheritance without harming the workers who helped provide that inheritance. For communities, it means being able to keep legacy businesses, stores and factories that helped define the local culture as well as jobs and capital.

In the United States, owners avoid Capital Gains taxes if they sell to their workers. I am not sure if Canada has similar laws, but my guess is that this conference will answer that question and more. The conference begins October 11 and runs through the 13th.

Starting on the 13th and running through the 15th, is the first NA worker coop conference. The close trading relationship between Canada and the United States led to this conference. The worker coops in Canada and the US have often worked together through their respective trade organizations: the USFWC and the CWCF. However, this is the first time for a joint conference. Amy Goodman of Democracy Now! will be speaking as well Bruno Roelants, General Secretary, International Organization of Industrial, Artisanal and Service Producers’ Cooperatives (CICOPA) which is the interational sectoral organization for worker cooperatives within the International Cooperative Association.

Of course, my good friend, USFWC President and Progressive Magazine blogger Rebecca Kemble will also be present and presenting. It should be an exciting conference and a rare opportunity for those of us in the US to learn about the Quebecois worker coop movement. Likewise, we will also be sharing some of our newest developments such as Union Cab’s new peer review program which moved disciplinary and accountability power from management to panels of peers. My fellow worker, Martha Kemble, will be presenting that topic.

However, the big event will be the creation of a CICOPA North America as a subgroup of the CICOPA Americas. Traditionally, the two continents of this hemisphere have been linked together in one geographical unit (the others of Europe, Africa and Asia). To be fair, the number of worker co-ops in the US was nominal until just a few years ago. However, the development of the regional trading groups, MERCOSUR and NAFTA, have caused the ICA map to become a bit dated. The work here, won’t undo that map, but it will create an organization that is better suited for working with the NAFTA based nations (including Mexico and the Caribbean) as our movements grow and prosper.

I am personally heartbroken that I cannot attend either of these conferences. Especially since I missed the Minneapolis conference in 2004 which established the USFWC. For those of you attending, please take my energy with you! I hope that someone publishes a report (and remember, you can do so on these pages if you would like).

August 8, 2011

The Power of the Mission

Filed under: Education,Management — Tags: — John McNamara @ 11:37 am

Recently, I was presenting a session on expansion and I discussed the role of mission statements. The main idea is that a first step at planning significant change in our co-ops should begin with an examination of our mission statements. Does the thing that we want to do fall within the mission of the co-operative? What I suddenly realized was something quite different! Sometimes the mission might lead us to do foolish things that either hurt our co-operative or cause us to stray from the co-operative identity.

Mission statements work best when they direct and easy to remember; however, this can also lose a lot of nuance. For example, the mission statement for my co-operative is “to create jobs at a living wage or better in a safe, humane and democratic environment by providing quality transportation to the greater Madison area.” If people only focus on the initial infinitive (and sometimes people do), it suggests that it is our mission to constantly grow the co-operative. I, however, see it as part of the larger statement. Our mission is to create jobs {ONLY IF WE CAN DO THAT IN A MANNER IN WHICH THOSE JOBS ARE} at living wage or better. . . . . .

I’ve heard some suggestions to change the “to create” to “maintain” but then I wonder what happens in an economic downturn when we simply can’t maintain all the jobs at a living wage.

When our mission was first written, we didn’t have the last bit about providing quality transportation. Our consultant thought it was a bit odd that our mission statement didn’t talk about what we did or how we would interact with consumers. It was (as you can see) incredibly internalized. I think that by adding the last phrase, we created a new consciousness among ourselves. I remember a General Manager in the 90’s specifically telling me that our passengers were our “oppressors” and our enemy (and I know that he wasn’t alone in that belief); today, I doubt that a single member of our co-op would have that analysis.

As kids we learn very quickly that words have a lot of power. They can hit us harder than a two-by-four and lifts our spirits higher than a kite. We don’t always extend that power to the business world. That mission statement hanging on the wall has a power too. It is a soft power that silently creates a culture around it. The words left off of the wall have just as much power as those included. We need to be cognizant of this and understand that a discussion of our mission statements needs to happen as new members enter the co-operative. We need to pass the nuance of our meanings onto the next generation of members so that they can manage the power of those words.

November 9, 2010

The Three Dimensional Business Integration

Filed under: Education,Human Relations — Tags: , , — John McNamara @ 7:26 pm

The people who work in our businesses are not two dimensional, why should the structure be?

If you have studied business, or even US history, you have likely heard the term “vertical integration”. This concept was developed by US Steel as a means of controlling the industry through control of the supply lines and distribution networks. It allows a company a lot of control and the ability to benefit from making expenses profit centers since the different parts of the supply and distribution chains can be used for non-competing products as well.

Another common concept is that of horizontal integration. This allows economies of scale as the company can create similar products within a market. General Motors was a great example of this format with the Pontiac, Oldsmobile, and Chevrolet nameplates have a number of common designs with slightly different features.

Well, those of the two external dimensions which notably ignore depth. Is there an example of a company engaged in depth integration? What would that look like? Further, what would a company look like if it engaged in all three forms of business integration to create a three-dimensional business model? There is a great example–Mondragon.

The depth integration develops from something that few US corporations would really care about (or it they did, it would likely end up as The Company Store). Depth, after all, creates an internal dynamic and this means attending to the needs of the workers and sustainability of the business. Of course, this is exactly what Mondragon has done.

First, however, they do have a fairly vertical integration in which they develop co-operatives to handle supply lines and distribution lines. Horizontally, ULGOR has been working hard to keep their place in the market by buying the smaller companies (most recently was the Brand corporation which was just behind ULGOR in market share). So far, Mondragon looks like a standard corporation operating on the global scale. This is where the third dimension arrives:

The Depth integration of Mondragon involves creating co-operatives to provide the social and human needs of the workers. This area of integration means a K-University school system, a Social Security system that provides a horn of plenty in terms of benefits and services, a banking system to meet the members needs and soon assisted living communities for the aging population. All of this works together to provide the basic needs of the workers and families.

Depth integration does more than simply keep the money in the Mondragon system. The presence of a university, management institute and trade school allows workers in unemployment to return to school and learn new skills. this not only benefits the worker, but helps Mondragon keep the correct number of workers to maintain decent wages and benefits. It provides other avenues for workers to use their knowledge and skills. A worker who can’t do the physical labor in the plant may transition to a teaching position. It allows workers to develop themselves as human being through their work. This was the ultimate idea of Mondragon’s spiritual founder, Don José María Arizmendiaretta.

In the US, we often marvel at Mondragon and people fall over themselves to either create Mondragon in the US or to expose every chink in the armor. Fortunately, there are plenty of grad students up to these tasks! However, something that we should consider is this revolutionary form of integration. We don’t need to re-create Mondragon in America, but we should consider how to develop a three-dimensional integration in our existing co-operatives. We need to see where we can partner with existing institutions and create the institutions that we don’t have.

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